SocialismToday           Socialist Party magazine

Socialism Today 156 - March 2012

A vile and brutal act

TORY CHANCELLOR George Osborne revealed in his autumn spending review (29 November 2011) that there will be a further £15 billion cuts in public spending in 2016 and 2017. This comes on top of the £83 billion cuts and £29 billion tax rises by 2015 announced in 2010. In effect, this commits both the Conservatives and Liberal Democrats to continued austerity after the next general election.

A key vehicle for these attacks will be the far-reaching Welfare Reform Bill designed to cut spending on welfare and benefits by £18 billion. It will deepen the neoliberal ‘reforms’ implemented by successive New Labour and Tory governments by introducing ‘universal credit’. Currently in its final parliamentary stages, it will have a devastating impact on millions.

In 2004, current Tory work and pensions secretary Iain Duncan Smith set up the think-tank Centre for Social Justice (CSJ) to develop new social policies for the Conservative party, including welfare reform. The CSJ emphasises the importance of Christian marriage and the ‘traditional’ nuclear family. It argues that family breakdown, economic dependency, joblessness, educational failure, addiction and personal indebtedness are the factors that cause poverty.

While this chimes with the Tories, it conveniently ignores the role of Margaret Thatcher’s government in creating the very social problems they claim to address. In particular, how Thatcher’s monetarist policies led to the destruction of much of Britain’s mining, steel, shipbuilding and manufacturing industry. The long-term, high unemployment levels. The growth of non-unionised, part-time, low paid jobs. The lowering of wages in real terms and the destruction of private pension schemes.

Welfare policies introduced in the past 20 years are designed to tackle long-term unemployment through the American approach of welfare-to-work. They have consciously led to the evolution of an increasingly draconian assessment and sanctions system coupled with some of the lowest benefit levels in Europe.

In 1998, Tony Blair’s Labour government introduced the New Deal programme. This forced young jobseekers to take part in subsidised work placements, education or training, voluntary or environmental work to qualify for benefits, with the threat of sanctions for those who did not comply. The New Deal encouraged single parents, people aged over 50 and disabled people to look for work or take part in work placements or training without compelling them to do so. It also introduced the use of private companies to provide training, job brokerage and other support. The most notable example of this is A4e (the so-called ‘social enterprise’, Action for Employment) founded by Cameron’s ‘families tsar’, Emma Harrison, who was awarded an annual bonus dividend of £8.6 million in 2010.

In 2003, Pathways to Work led to the introduction of compulsory work-focused interviews for new incapacity benefit claimants. Then in 2006, the Department for Work and Pensions’ new five-year strategy included a proposal to get as many as one million people currently on incapacity benefit back into employment. To this end, the misnamed Welfare Reform Act 2007 introduced the employment and support allowance (ESA) in October 2008 for new claimants. This replaced incapacity benefit and income support based on incapacity or disability.

The brutal work capability assessment (WCA) is now used to assess an individual’s entitlement to ESA using a function-based approach. Between October 2008 and August 2010, 887,300 out of 1,175,700 claimants failed to qualify for ESA. Thirty-nine per cent were judged fit to work and 36% stopped their claim. Of those found fit for work between October 2008 and February 2010, 36% appealed. The original decision was overturned in 39% of cases.

Over the whole period, around 105,000 (9%), with the most complex conditions, were placed in a support group, and 16% in a work-related activity group where they have to do training or placements to prepare them for work or face sanctions. Of the 70,000 who lost all benefits through sanctions in October 2010, 20,000 were disabled people.

New Labour’s final contribution was its Welfare Reform Act 2009. This agreed to the migration of one-and-a-half million incapacity benefit claimants onto ESA or jobseekers’ allowance (JSA) from April 2011, with 1.25 million expected to see a cut of £25 per week in their already meagre income when they fail the WCA. Mandatory work activity (MWA – work-for-your-benefits) was also introduced for jobseekers, with seven-year contracts being given to private companies, including A4e, to ‘help’ people find work. Other measures include pushing lone parents with young children to prepare for work using compulsory work-related activities, and making claimants who are drug users or alcoholics take part in rehabilitation.

Prior to Duncan Smith publishing his white paper, Universal Credit: Welfare that Works (November 2010), the Tory/Liberal coalition carried out its ‘21st Century Welfare’ consultation. This prepared the political ground for the idea of basing further changes to welfare on a simplification of the benefits and tax-credit system and getting more people into work.

The naivety of some voluntary sector organisations in sharing Duncan Smith’s vision, without considering the broader context of his approach to welfare reform, spending cuts and tax rises, was highlighted in the government’s summary of this consultation. For example, Citizens Advice wrote: "We broadly welcome the direction of welfare reform proposed by the coalition government and we support the intention to make the benefit system simpler and clearer for claimants, and to make work pay". The Terence Higgins Trust supported "the view that significant savings could be made within the benefits system through increased efficiency and improved administration".

The political straitjacket this placed many charities in was highlighted by the position of The Hardest Hit (THH) campaign, set up by the United Kingdom Disabled People’s Council and the Disability Benefits Consortium, a coalition of about 50 disability charities. In the wake of its national demonstration of 5,000 disabled people, family carers and supporters on 11 May 2011, THH developed a limited set of demands that accepted universal credit would happen and simply focused on persuading the government to continue to recognise the extra cost of living with an impairment or disability.

Therefore, the universal credit that Duncan Smith first proposed will pass into law unaltered. This ‘progressive’ simplification of the benefits system will merge income-related JSA, housing benefit, child tax credit, working tax credit, income support and income-related ESA into a single universal payment. The discretionary social fund, community-care grants and some crisis loans will be abolished. Families will be subject to a benefits cap, including housing and child benefit, of £26,000 a year. At least 130,000 families in London will soon be unable to afford their rent. London councils are already planning to move families as far away as Yorkshire or the south coast.

Contributions-based JSA and ESA will continue to exist, but only for six and twelve months respectively. After this, other family income, such as the wage of a partner who works, will be taken into account. People finding work who are low paid will be able to keep some of their benefits, but there will be an expectation that they take up any offer of employment, even if this is for only a few hours a week.

The only claimants who will not be expected to prepare or look for work will be those in the ESA support group. Those who refuse to take part in or complete MWA, including voluntary work, will be subject to a more brutal sanctions regime with the loss of benefits for up to three years. The bill will also replace disability living allowance with personal independence payments which will see half-a-million lose vital care and mobility benefits.

The publicity surrounding several amendments to the bill in the House of Lords in January gave disabled people and family carers some hope its impact might be minimised. The combined majority of the Tories and Liberals, however, defeated them in the Commons. The use of ‘financial privilege’ to stop the Lords trying to reintroduce even their minimal changes also illustrates the fact that The Hardest Hit campaign’s strategy of amending the bill in the Lords was doomed from the start.

Nonetheless, given the millions who will be affected by this bill, a movement can still be built to stop this and other welfare reform. This has to be based on the active involvement of tens of thousands of benefit claimants, disabled people and family carers linking with the trade unions, rather than relying on sympathetic peers in the Lords.

Mark Nicholson


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